Internationally Crowded with Crazy Rich Moving Here, House Prices Reach IDR 317 Billion Entrepreneur – 1 day ago

Jakarta, CNBC Indonesia – Some of the world’s super rich have reportedly shifted their focus to owning property here. That region is South Florida in the United States (US).

This has also raised property prices in this tropical region. Data from two property consultants, Douglas Elliman and Miller Samuel, are quoted CNBC International Friday (20/10/2023) showed that the average selling price of houses in Palm Beach reached US$ 20 million (Rp. 317 billion) in the third quarter of 2023.

The average price per square foot of homes for sale in Palm Beach has also reached US$ 4,554. This is 2.5 times more expensive than Manhattan, New York.

“The prices are incredible. Inventory is very limited, especially in the ultra-high net worth group, where all the customers are flocking to look for amazing lakefront or beachfront properties,” said Chris Leavitt, a leading Palm Beach broker at Douglas Elliman.

Leavitt added low inventory will continue to put pressure on prices. This makes property in prime areas expensive even for multimillionaires.

“You can still find great homes here for under $10 million. I know this sounds like an alternate universe. Because yes, it is an alternate universe,” he added.

The growth of luxury homes in South Florida is being driven by the movement of millionaires and billionaires from high-tax states such as New York, New Jersey and California. Because ultra-wealthy buyers typically pay cash for their real estate, they are less affected by soaring mortgage interest rates.

“Palm Beach had just 53 homes on the market in the third quarter, down 61% from pre-pandemic levels. The shortage of listed homes has reduced the number of sales, which are down 31% over the past year,” said Miller Samuel CEO Jonathan Miller.

At the end of July, the waterfront house last bought for US$ 7.4 million (Rp. 117 billion) was sold for around US$ 50 million (Rp. 793 billion). The seller was the late liquor distributor James Tigani, Jr., and the buyer was reportedly venture investor Harvey Jones.

Fashion tycoon Tommy Hilfiger, for example, this summer sold a mansion in Palm Beach for US$ 41.4 million (Rp. 656 billion). This is less than six months after he bought it for US$ 36.9 million (Rp. 585 billion).

The record for the most expensive home sale in Palm Beach occurred in April. At that time, luxury car dealer Michael Cantanucci paid US$ 170 million (Rp. 2.7 trillion) for a 1.6 hectare beachfront house.

Meanwhile, another area, Miami Beach, also reported an increase in home values ​​of up to 62%. Douglas Elliman and Miller Samuel put the average price of luxury real estate in Miami Beach at a record US$ 25 million (Rp. 396 billion).

Tech billionaire Eric Schmidt and his wife are the latest billionaires to start amassing a real estate collection in Miami. Brokers said the couple had bought more than half a dozen homes on Sunset Islands, spending more than US$ 140 million (Rp. 2.2 trillion).

Billionaire hedge-fund Ken Griffin continues to expand his footprint on Star Island, recently buying back a piece of property for US$ 45.5 million (Rp. 721 billion). He had sold the property to retired baseball star Alex Rodriguez in 2020 as part of a land swap.

Jeff Bezos also joined the billionaire beach club, spending $150 million (Rp. 2.3 trillion) on two adjoining properties in Indian Creek Village. The two properties give him a combined 4.6 acres of land.

“The luxury and high-end housing market does not appear to be tied to mortgage rates and the current economy,” added Jonathan Miller. “Both Palm Beach and Miami Beach are unaffected by interest rate trends.”

[Gambas:Video CNBC]